Investment banking firm Jefferies has published a new report warning that the use of standby coal capacity risks blunting net zero target ambitions. Germany, Italy, Austria and the Netherlands have put an estimated 17 gigawatts (GW) of coal power capacity on standby, which – if used – would create carbon emissions equivalent to 2% of total 2021 EU emissions. Jefferies further warned investors that a switch from gas back to coal could lead to an additional €4.5 billion worth of EU Emissions Trading Scheme (ETS) allowances being purchased or surrendered by firms operating the installations. The report has recommended investors should consider the impacts on the EU ETS price, corporates and geopolitical landscape should the gas-to-coal switching period last for longer than expected. The closure of the Nord Stream 1 pipeline is due to end on Thursday 21 July, but the EU remains concerned over what the gas flow levels will be when it does. The report has suggested gas-to-coal switching could hinder the EU’s efforts to meet its 2030 emissions reduction target.